If real GDP exceeds potential GDP, then the unemployment rate ________ the natural unemployment rate
A) is greater than
B) equals
C) is less than
D) The premise of the question is incorrect because the relationship between real GDP and potential GDP has nothing to do with the relationship between the unemployment rate and the natural unemployment rate.
E) The premise of the question is incorrect because real GDP can never exceed potential GDP.
C
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An inflationary gap means that the level of real GDP at the short-run macroeconomic equilibrium
A) is less than full-employment GDP. B) equals full-employment GDP. C) is more than full-employment GDP. D) may be less than, more than, or the same as full-employment GDP depending on the level of potential GDP.
For a given set of prices, two consumers choose bundles that are off the contract curve. In a competitive market,
A) prices will adjust until the consumers choose bundles that are on the contract curve. B) the indifference curves will shift back to the contract curve. C) the contract curve will shift to connect these bundles. D) no adjustments need to be made.
In the long run, Bubba's Baby Boutique, a monopolistically competitive firm,
a. earns zero normal profit but positive economic profit b. earns normal profit but zero economic profit c. earns normal and economic profit d. earns zero normal and economic profit e. might earn any level of economic profit; no level is guaranteed
The fact that voters perceive their votes as unlikely to actually change the outcome of an election causes
a. voters to have little incentive to become informed about candidates and political issues. b. voters to spend a great deal of effort becoming informed about candidates and political issues. c. the percent of people who actually turn out to cast a vote on election day to be very high. d. people to be extremely reluctant to "waste" their votes on a third-party candidate.